1. Party Politics, Governors, and Economic Policy.
- Author
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Fredriksson, Per G., Le Wang, and Warren, Patrick L.
- Subjects
INCOME tax ,DOUBLE taxation ,PROGRESSIVE taxation ,DIRECT taxation - Abstract
In this article, we evaluate the role of elections in governors' state tax policy making. Does it matter for state taxes whether the governor is a Democrat or Republican and whether she is eligible for re-election or faces a binding term limit? Using a Regression Discontinuity Design and a panel of U.S. states, we find that the manner in which governors of different parties implement different tax policies turns crucially on the incumbent's eligibility for re-election. Re-electable Democratic governors increase income taxes relative to similarly situated Republicans, yielding divergence between party policy positions. However, governors facing a binding term limit exhibit the reverse policy difference, resulting in a movement of policy back together. [ABSTRACT FROM AUTHOR]
- Published
- 2013
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